Archives of “May 14, 2019” day

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OPEC says supply fell slightly in April

  
Analysis, Crude

Highlights of the OPEC monthly report

  • OPEC output fell by 3000 bpd to 30.031 mbpd, citing secondary sources
  • Members bound by supply deal met 150% of pledged reductions
  • Oil inventories in OECD rose by 3.3m barrels and stood 22.8m barrels above 5-year avg
  • 2019 global demand forecast unchanged
  • Trims non-OPEC supply growth forecast by 40,000 bpd to 2.14mbpd
  • Saudi output fell to 9.742mbpd
The changes here are all very small. They note that US shale is facing logistical challenges.

Trump says US is in a ‘fantastic position’ against China on trade

  
  Analysis

Trump tweets more about US-China trade relations

The latest tweets read:

China buys MUCH less from us than we buy from them, by almost 500 Billion Dollars, so we are in a fantastic position. Make your product at home in the USA and there is no Tariff. You can also buy from a non-Tariffed country instead of China. Many companies are leaving China…..

….so that they will be more competitive for USA buyers. We are now a much bigger economy than China, and have substantially increased in size since the great 2016 Election. We are the “piggy bank” that everyone wants to raid and take advantage of. NO MORE!

He’s right in that sense that China can’t choose to retaliate tit-for-tat in terms of tariffs but there’s other ways in which China can pursue to defend its interests. And weaponising the Chinese yuan would definitely be one of them, although they would very much like to avoid that where possible.

Eurozone March industrial production -0.3% vs -0.3% m/m expected

  
  Analysis

Latest data released by Eurostat – 14 May 2019

  • Prior -0.2%; revised to -0.1%
  • Industrial production WDA -0.6% vs -0.8% y/y expected
  • Prior -0.3%
Industrial activity in the region slowed further in March and this just pretty much confirms the sluggishness of the sector in Q1 2019. This is very much a lagging indicator as we already had plenty of glimpses into the sector’s performance over the past month or so.

Pakistan’s currency in line for further hits after IMF loan

  
Analysis, Forex

Pakistan’s opposition parties have promised to resist the country’s upcoming $6 billion loan agreement with the International Monetary Fund, terming the deal a sellout on the part of Prime Minister Imran Khan’s government.

An initial agreement, announced late on Sunday, has Pakistanis angry for two main reasons: It calls on them to start paying their income taxes and sets the stage for their money to lose more of its value.

On Monday, Ahsan Iqbal, a senior leader of the opposition Pakistan Muslim League-Nawaz, told the Nikkei Asian Review that the agreement “is a complete capitulation [and in disregard to] Pakistan’s national interests. Never before in our history have we seen a government accept such tough conditions tied to an IMF program.”

Iqbal’s sentiment is widely shared among opposition leaders. After Reza Baqir, a former IMF official and a well-respected economist, early this month was appointed governor of Pakistan’s central bank, opposition leaders rejected the nomination. Iqbal said Baqir’s appointment only confirms that Pakistan has become “a colony of the IMF.”

He added, “You now have an IMF man running our central bank.” (more…)

China says that it doesn’t want a trade war but it isn’t afraid of one

  
  Analysis

Note the subtle change in language on tensions being a trade dispute back to being a trade war again now

  • Says that tariffs won’t solve problems
  • Says that it is natural to have disagreements in negotiations
  • Hopes that US doesn’t underestimate Chinese determination to protect its interests
I still believe that both sides are very much at a stalemate right now, rather than surreptitiously working towards a deal over the next few weeks. Both sides are producing statements like these with subtle “threats” and that’s a far cry from how the rhetoric has been over the past few months when the situation was more “friendly”.
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